A very intriguing announcement: One that, I think it would be fair to say, few shareholders, if any, would have expected.
An acquisition? That certainly came out of left field, and has certainly piqued curiosity. What exactly is the prize that the management of this company have their eye on?
Just after reading over that announcement, I was scrolling through my social media feed, and I noticed a post by Pulsar Helium.
As many here would be aware, Pulsar made its debut on the TSX late last year and grabbed headlines across the USA earlier this year with their discovery of astonishing helium grades beneath Minnesota's Iron Range, boasting concentrations as high as 12.4%.
As an observer of the helium space, I like to keep an eye on what Pulsar are up to. In this instance, however, there wasn't much to report: the post was fairly inconsequential, reporting on the arrival of drill mast at the company's Topaz project in Minnesota.
What did catch my attention, however, was a comment below the post:
What's the connection between Trent Spry and Minnesota? And what's the project being referred to here?
Perhaps with drilling delayed by the adverse conditions in Colorado, Spry is lending a hand with the drilling at Topaz? So, nothing to see here, perhaps?
Perhaps. But all the same, I find it curious that the above comment about a 'Minnesota Project' appeared on the very same day that Blue Star released that 'blue bolt' announcement regarding an acquisition.
It does beg the question: Has Blue Star followed in Pulsar's footsteps, and extended their hunt for helium (or hydrogen) to Minnesota?
This, of course, is a purely speculative suggestion, and perhaps I'm reading too much into the above comment. That said, it
might make sense.
Keep in mind that Blue Star was among the early movers in the US helium space, and for a considerable period, Blue Star made much of its exposure to the highest-grade helium field in the United States. Their thunder, however, was well and truly stolen by Pulsar's truly light-punching drill results in Minnesota early this year.
You can be sure that Trent Spry has been keeping a keen eye on developments in Minnesota over the past year. After all, US oil and gas lease acreage is his natural habitat. He's been wheeling and dealing in that space for the better part of fifteen years. Considering his natural interest in US helium, I'd bet he'd be watching Pulsar's every move in Minnesota like a hawk.
So, could it be possible that Blue Star might have swooped in and stolen a piece of Pulsar's lunch? If anyone has got the nous and know-how to pull off such an audacious move, it's got to be Spry.
Another factor that makes this scenario plausible is that it wouldn't necessarily have to break the bank. Reading through the posts here yesterday, I noticed some concern about the possibility of another capital raising. However, securing US lease acreage is as much about street smarts, insider knowledge, being in the right place at the right time, and having the gumption to act, as it is about the dollars.
To give an example of one such deal, earlier this year Pulsar
entered into a transaction with a private mineral rights holder over 2,092 net acres located near their Minnesota Topaz project, paying US$313,800 or US$150 per acre, including a 20 per cent royalty and a 5-year term for undeveloped land.
It’s exactly the kind of deal Blue Star has the capacity to execute, and one that could potentially deliver significant value.
Currently, the BNL market cap sits at a paltry $12 million: Seemingly a rather unreasonable price-tag for a company that is probably set to generate significant $$$$ within the next 12 months. And if Trump's tax cuts come into effect, less of those dollars are going to be going to the tax-man.
By way of comparison, Pulsar's market cap is currently around the $70 million mark.
It remains to be seen whether the flagged acquisition is a borrowing from the Pulsar playbook.
But if Spry has sown up a sweer deal in Minnesota, that's something to keep a lookout for. It has the potential to impart significant upside to the share price.
(20min delay)